Parliament

Financial institutions often hire foreigners for specialised, global roles

This is why median wage band of S'poreans is lower than that of foreigners, PRs: Minister

Singapore's rules constrain the inflow of foreigners at the lower end, said Transport Minister Ong Ye Kung, who is a Monetary Authority of Singapore board member. This means a larger share of foreigners tend to be earning higher wages and consequentl
Singapore's rules constrain the inflow of foreigners at the lower end, said Transport Minister Ong Ye Kung, who is a Monetary Authority of Singapore board member. This means a larger share of foreigners tend to be earning higher wages and consequently, the median would be at a higher level too.ST PHOTO: LIM YAOHUI

In the financial sector, Singaporeans in the middle of the income spectrum for citizens earn less than permanent residents and foreigners at the same point in their income spectrums.

Monetary Authority of Singapore board member Ong Ye Kung told Parliament yesterday that for Singaporeans, the median wage band is $6,000 to $8,000 a month, while for PRs and foreigners, it is $8,000 to $10,000.

In senior level positions, about half of Singaporeans and half of foreigners earn above $30,000 a month, while almost two-thirds of PRs do so, he said, adding that these sets of data are "as one would expect".

The reason is financial institutions often bring in higher-earning foreigners to perform specialised, or regional and global roles.

Also, Singapore's rules constrain the inflow of foreigners at the lower end, said Mr Ong, who is the Transport Minister.

This means a larger share of foreigners tend to be earning higher wages and consequently, the median would be at a higher level too.

Also, foreigners with impressive profiles and track records in Singapore would be expected to be more successful in attaining PR status.

"In other words, this data shows outcomes which reflect the fact that we regulate the inflow of foreigners, and apply selective criteria in granting PR to those who were previously foreign PMEs (professionals, managers and executives)," he said.

"If there was no regulation to control the inflow of Employment Pass holders, and no criteria and conditions for PRs based on their track records, these earning differentials will naturally narrow or disappear."

He was responding to Mr Louis Chua (Sengkang GRC), during question-and-answer time, on the breakdown of the monthly salary for Singaporeans, PRs and foreigners in the financial sector at the 25th, 50th and 75th percentiles.

Mr Ong said such a breakdown would not be meaningful. The reason is a foreigner and a Singaporean at the same percentile of their respective wage spectrums could be doing very different jobs and thus earning different salaries.

 
 
 

On Tuesday, when he addressed concerns about whether there are enough opportunities for Singaporeans in the financial sector, he said in the debate on the President's Address that the absolute number of Singaporeans in senior roles had grown from 1,700 to 2,600 from 2014 to last year.

  • $6,000 to $8,000

    Median monthly wage band of Singaporeans in financial sector.

    $8,000 to $10,000

    Median monthly wage band of PRs and foreigners in financial sector.

    About ½

    Share of Singaporeans in senior level positions in the financial sector who earn above $30,000 a month. The share of foreigners is also about half, while that of PRs is almost two-thirds.

Yesterday, replying to Mr Chua who had asked about efforts to help Singaporean middle managers move up into senior management roles, Mr Ong said the approach should be to be open to the world and grow as a global financial centre, while investing in developing Singaporeans and working with financial institutions to do so.

"If we keep saying let's just be a lake, shut ourselves out from the lagoon, and the lagoon shut itself out from the sea, we will always be a small pond."

He added: "You can develop your middle management to take up senior positions but your market will be small."

A version of this article appeared in the print edition of The Straits Times on September 05, 2020, with the headline 'Financial institutions often hire foreigners for specialised, global roles'. Print Edition | Subscribe